The chief executive of Gannett, the largest newspaper publisher in the country, announced widespread cost-cutting to its newsrooms Wednesday, citing headwinds from the “deteriorating macroeconomic environment.”
In a memo to the staff, chief executive Mike Reed said the company would require employees to take unpaid leave in December, offer voluntary buyouts and temporarily suspend 401(k) contribution matches. Gannett will also freeze hiring except for crucial positions, Reed said.
He said the changes were needed to ensure the company’s long-term success.
“In order to sustain the mission of our company to empower communities to thrive, sustain local journalism and support small businesses with digital solutions, we need to ensure our balance sheet remains strong,” Reed wrote in the memo, which was obtained by the New York Times.
Reed said the company was offering severance to employees who volunteer to leave the company. It is also giving employees the option to adjust their schedules to work fewer hours for less pay or to take unpaid sabbaticals of up to six months. Five days of unpaid leave are required in December, Reed said.
“This mix of temporary and permanent actions allows us the near-term flexibility we need to drive improvement while preserving our ability to quickly pivot as we see the economy and areas of our business progress,” he wrote in the memo.
Gannett publishes newspapers including USA Today and more than 220 dailies. Two months ago, Gannett cut 400 jobs and paused hiring in 400 more after weak second-quarter earnings results. The company reported a 6.9% decline in revenue year over year to $748.7 million, with a loss of almost $54 million. Gannett’s stock is down more than 70% for the year.
The company has more than $1 billion in debt from its merger in 2019 with GateHouse Media. The company said this month that it had repaid $55 million of the debt since June 30 from the sale of real estate and other assets.
“We’ve been transparent about the need to take immediate action given the uncertain and challenging economic environment,” Lark-Marie Anton, Gannett’s chief communications officer, said in a statement. “While difficult, we are confident these decisions will ensure Gannett’s future.”
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